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8 Answers
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There are lots of good (and bad) times to back stab, I'm not sure there is an out and out correct answer. This is one of the fun aspects of Diplomacy: its variation.

However, early back stabbing is probably almost always best avoided, as you will probably lose credibility with the other players if they think you are unreliable.

Sometimes the best back stabs are against players you have had very long alliances with, when they least expect it.

I also sometimes wait until I have a (usually hidden) alliance with another player, against the same player I am planning to back stab. That way they get hit with a double whammy and you have an extra level of insurance.

Finally, just past the 5th playing hour, as the tiredness and alcohol kicks in, if my experiences are anything to go by, is usually a good time to back stab and lose friends ;)

You should only backstab an ally if that means the difference between losing or winning the game. So you shouldn't backstab for 1 or 2 centers. Settle for 3 or more and be sure you can grab them and keep them too. And to mention the obvious, do not backstab in the spring.

If you backstab often, players remember and refuse to ally with you (or at least the aliances aren't that stable). If you never backstab, players remember too and just walk over you.

I tend to find that beginners backstab too early, and do so to just grab an SC or two. Real experts seem to play with much more fluid alliance systems where it's not entirely clear what a backstab would be.

But as an intermediate player, my usual plan is to try to backstab just as we eliminate our first victim, or a little later - somewhere in the 7-10 SC range.

Time the backstab to cripple the former ally, so you can eliminate them pretty quickly, and you're well on the way to winning.

A tried-and-true expert strategy is to make all alliances fixed-term rather than indefinite, often for just a single season or year. By the nature of the game, these short-term alliances will tend to direct their attention to all long-term alliances for self preservation, which rapidly eliminates those players who fail to engage n this strategy. Then the pros divvy up Europe for themselves and get down to the big ante game.
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Pieter GeerkensAug 21 '14 at 22:28

Upon this, one has to remark that men ought either to be well treated or crushed, because they can avenge themselves of lighter injuries, of more serious ones they cannot; therefore the injury that is to be done to a man ought to be of such a kind that one does not stand in fear of revenge.

The problem with backstabbing in a "best time to backstab" is that your ally might also backstab you or be expecting you to backstab.

I once backstabbed France when I was England. We could have won a two way victory. But I saw He was getting stronger much faster than me, so I backstabbed him and evened our strenghts. The problem was that now I totally lost credibility and was in danger of having to fight my former ally and the third player who was left. We ended up in a three way victory.

So to provide an answer to your question. I think that the best time for a backstab is when you can make it look like to everyone else that you were doing the right thing. And/or already have other allies upon who you can rely.

Let's say Italy, Russia, and Turkey are allied against Austria Hungary. After that country is gone, two of the allies might gang up on the third. (Unless there are "personalities" involved, Italy and Turkey against Russia is the least likely.) In any event, the old schoolyard proverb is applicable: You don't want to be the odd man in a three way fight.

And if it is TWO backstabbers against one, you won't get nearly as much opprobrium, either alone, or both put together, as if either of you had backstabbed individually.

Perhaps I'm jaded from online play but I have found that reputation seems to matter little online (in person it makes a big difference). I have literally been the victim of 1st turn lies and betrayals in every online game I've played. I believe I've had about a 3 to one ratio of unkept vs kept early move promises. But as far as can tell no one seems less likely to work with these players because of it. The reason is simple: they are all doing the same thing and expect that everyone is. So it seems everyone is backstabbing near constantly and the only consideration seems to be who can offer immediate payback. If you can't offer much payback (especially central powers early), you get carved up quick.

So I feel like online people play as if trust starts out at zero and stays there.